Indonesia's Bank Central Asia joins scheme to boost liquidity

The government said healthy lenders can apply to cash-strapped peers.

Indonesia’s Bank Central Asia may join a government programme that will lend to banks in order to boost liquidity, reports Reuters.

Last week, the country’s Financial Services Authority and finance ministry said big healthy lenders can apply to lend to cash-strapped peers, using funds provided by the government.

Banks can provide liquidity using a special purpose vehicle with the interest rate capped at a level that the government will set, plus 300 basis points.

It is the first scheme in Indonesia to include commercial banks. In past crises, the central bank has provided short-term liquidity support.

Here’s more from Reuters.